Asco 2018 event analyser – A year of reset expectations

Deciphera Pharmaceuticals emerges as one of the Asco 2018 winner as Jounce Therapeutics falls on weak data.

In an Asco dominated by news about big pharma immunotherapies in first-line lung cancer, it was Deciphera Pharmaceuticals that came away as the big winner on the stock market, on early data in gastrointestinal stromal tumours. Encouraging phase I results from its kinase switch control inhibitor, DCC-2618, vaulted the freshly public company over the $1bn valuation mark for the first time.

On the negative side was Jounce Therapeutics, which suffered a second drop on the presentation of data on its Icos-blocking agent; the stock had already plunged when the Asco abstracts were released three weeks ago. With cautious investors also pulling away from companies like Nektar, Dynavax and Celldex, it looks like developers chasing the next immuno-oncology combination are going to have to start delivering more convincing data.

To measure the effect of Asco-related share movement, EP Vantage analysed changes from the market’s close on May 16, just before the meeting’s abstracts were released, through June 5, the final day of the conference. Companies are ranked by percentage change in share price.

Cracking the code

Deciphera received a proper Asco meeting surge, with shares having been relatively calm in the run-up to its Saturday readouts on DCC-2618 in gastrointestinal stromal tumours. The company had already announced its intention to initiate a phase III trial in fourth-line disease, and data presented at Asco likely gave investors comfort that regulators will wave through a trial in second-line disease, too.

That comfort would be based on data from an open-label phase I trial indicating a 24% overall response rate in the second- and third-line settings, compared with historical figures of 7% for Sutent in second-line disease and 4.5% for Stivarga in third-line disease.

Notable Asco-related share price risers 
Company Change in share price Change in market cap ($m) 
Deciphera Pharmaceuticals 55% 460
Foundation Medicine 33% 995
Northwest Biotherapeutics 33% 29
Loxo Oncology 31% 1,290
Aslan Pharmaceuticals 29% 61
Immunomedics 29% 937
MEI Pharma 27% 33
Idera Pharmaceuticals 8% 33
Seattle Genetics 8% 720
Immunogen 6% 93
Bluebird Bio 6% 564
Fibrogen 5% 226
Merck & Co 3% 4,412

Northwest Biotherapeutics benefited from timely publication of survival data of DCVax-L in a glioblastoma trial – however, the company attracted criticism for not reporting full results from the long-delayed study. Its climb from 21 to 28 cents a share during the Asco period puts its 25% rise in perspective, but having fallen out of the Nasdaq and gone to over-the-counter trading it is in need of positive news to put it back in the exchange’s good graces.

Immunomedics not only benefited from having data on its antibody-drug conjugate sacituzumab govitecan in breast cancer but also the announcement of a collaboration with Clovis Oncology to test the ADC with Rubraca in breast and urothelial cancers.

Fibrogen presented early data for pamrevlumab with chemotherapy in pancreatic cancer, showing that more patients receiving the combination saw sufficient tumour shrinkage to be eligible for resection when compared with chemo alone, 33.3% vs 7.7%. Those patients who achieved resection had longer survival, 40 months vs 18.6 months.

Double down

For Jounce it went from bad to worse. Following the 30% drop after the abstract release, its shares fell another 33% on Monday after the full data readout for JTX-2011. A woefully low response rate even in combination with PD-1 blockade had others working on the Icos pathway, like Glaxosmithkline, emphasising how their candidates were different from JTX-2011.

Notable Asco-related share price fallers
Company  Change in share price Change in market cap ($m) 
Jounce Therapeutics -57% -326
Nektar Therapeutics -35% -5,114
Noxxon Pharma -35% -4
Syndax Pharmaceuticals -30% -84
G1 Therapeutics -24% -381
Innate Pharma -19% -86
Dynavax Technologies -18% -212
Blueprint Medicines -13% -486
Tesaro -13% -347
Mersana Therapeutics -12% -47
Pharmamar -9% -42
Celldex Therapeutics -9% -9
Roche -7% -17,400
Abbvie -6% -9,204
Celgene -4% -2,457
Bristol-Myers Squibb -1% -474

Roche, like Bristol-Myers Squibb, finds its PD-L1 inhibitor Tecentriq effectively shut out of broad usage in non-small cell lung cancer, and even in the squamous histology Merck & Co’s Keytruda can already claim an overall survival benefit while Roche must wait for more data. It is rare to see a big player move as much as Roche did over the Asco period – its market cap tumbled more than $17bn.

Abbvie was also in the big pharma loser category. Its investment in Rova-T appears to be all but dead, sending its shares down 6%.

While Merck was prospering on Keytruda data, companies working in partnership with PD-(L)1 agents all suffered during the Asco trading period – an abundance of caution now exists since the epacadostat disaster. Companies suffering from this included Noxxon, Dynavax, Celldex and Nektar.

Asco 2018 can be seen as a resetting of expectations surrounding immuno-oncology. While some investors might have been caught out by the change in sentiment, it is probably positive for the sector if hopes do not outrun reality.

An EP Vantage staff report. To contact the writers of this story email [email protected] or follow @EPVantage on Twitter

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